Rupak Ltd. issued 10,000 shares of Rs.100 each payable Rs.20 per share on application, Rs.30 per share on allotment and balance in two calls of Rs.25 per share. The application and allotment money were duly received. On first call, all members paid their dues except one member holding 200 shares, while another member holding 500 shares paid for the balance due in full. Final call was not made. Give journal entries and prepare cash book.
JOURNAL ENTRIES IN THE BOOKS OF RUPAK LTD.
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|---|---|---|---|---|
| Bank A/c Dr. | 2,00,000 | |||
| To Share Application A/c | 2,00,000 | |||
| (Being application money received on 10,000 shares @ Rs.20 each) | ||||
| Share Application A/c Dr. | 2,00,000 | |||
| To Share Capital A/c | 2,00,000 | |||
| (Being application money transferred to Share Capital) | ||||
| Share Allotment A/c Dr. | 3,00,000 | |||
| To Share Capital A/c | 3,00,000 | |||
| (Being allotment money due on 10,000 shares @ Rs.30 each) | ||||
| Bank A/c Dr. | 3,00,000 | |||
| To Share Allotment A/c | 3,00,000 | |||
| (Being allotment money duly received) | ||||
| Share First Call A/c Dr. | 2,50,000 | |||
| To Share Capital A/c | 2,50,000 | |||
| (Being first call money due on 10,000 shares @ Rs.25 each) | ||||
| Bank A/c Dr. | 2,57,500 | |||
| Calls-in-Arrears A/c Dr. | 5,000 | |||
| To Share First Call A/c | 2,50,000 | |||
| To Calls-in-Advance A/c | 12,500 | |||
| (Being first call money received with arrears and advance) |
CASH BOOK (Bank Column)
| Date | Particulars | L.F. | Amount (Rs.) | Date | Particulars | L.F. | Amount (Rs.) |
|---|---|---|---|---|---|---|---|
| Share Application A/c | 2,00,000 | Balance c/d | 7,57,500 | ||||
| Share Allotment A/c | 3,00,000 | ||||||
| Share First Call A/c | 2,45,000 | ||||||
| Calls-in-Advance A/c | 12,500 | ||||||
| 7,57,500 | 7,57,500 |
WORKING NOTES:
1. First Call Amount Due: 10,000 shares × Rs.25 = Rs.2,50,000
2. Calls-in-Arrears: 200 shares × Rs.25 = Rs.5,000
3. Calls-in-Advance: 500 shares × Rs.25 = Rs.12,500 (Member paid final call amount in advance)
4. First Call Amount Received: Rs.2,50,000 - Rs.5,000 (Arrears) = Rs.2,45,000
5. Total Bank Receipts: Application: Rs.2,00,000 Allotment: Rs.3,00,000 First Call: Rs.2,45,000 Calls-in-Advance: Rs.12,500 Total: Rs.7,57,500
Explanation
This question tests understanding of share issue with calls-in-arrears and calls-in-advance. The member holding 200 shares failed to pay first call (Rs.5,000 arrears). The member holding 500 shares paid both first call and final call in advance (Rs.12,500 as calls-in-advance). Final call was not made, so no entry for final call. The cash book shows total receipts of Rs.7,57,500 with balance carried down.
Solution Steps
Step 1: Calculate application money received: 10,000 × Rs.20 = Rs.2,00,000
Step 2: Calculate allotment money received: 10,000 × Rs.30 = Rs.3,00,000
Step 3: Calculate first call due: 10,000 × Rs.25 = Rs.2,50,000
Step 4: Calculate calls-in-arrears: 200 × Rs.25 = Rs.5,000
Step 5: Calculate calls-in-advance: 500 × Rs.25 = Rs.12,500
Step 6: Pass journal entries and prepare cash book with total receipts Rs.7,57,500